Why are UP and Bihar are described as bimar and squalor states of India

Why are UP and Bihar are described as bimar and squalor states of India

New Delhi,August4:It’s been 32 years since the late demographer Ashish Bose coined that famously disparaging phrase ‘Bimaru states’, in a one-page report to the then prime minister Rajiv Gandhi.

The acronym for Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh, which referenced the Hindi word for ‘sick’, would now be seen as a form of naming and shaming, done perhaps with the intention of prodding the guilty into trying to change. But this burden of guilt—if we assign it to human failure, which is what a failure of vision and commitment in governance would be—is not an easy one to redress. The term continues to cause offence, and there are periodic claims of this state or that having escaped the infamy, but the harsh reality is that, at the root, the sickness seems endemic—and it endures.

Review the medical condition as it obtains now. What Bose was referring to in 1985—to bundle all development indices into a simple demographic—was the huge ratio of the poor in these states, accounting for nearly 40 per cent of India’s population at the time. These intervening decades have seen India go through some epochal changes, and it’s now routinely referred to as an engine of global growth. These states too have not been immune to the tidal churn unleashed, yet they lie at the heart of a big set of disturbing economic challenges the country faces.

In 1960, the top three states were 1.7 times richer than the bottom three. By 2014, this gap had almost doubled.

Bose’s ailing states, especially UP and Bihar, remain laggards in terms of prosperity and income, judged by the par­ameter of net state domestic product, read along with a few other factors. Despite robust growth rates, and despite Mandal politics creating new forms of social mobility, they haven’t been able to reduce the gap with the club of rich states. It’s a troubling gap, and speaks of a huge, unfair skew in India’s economic map.

The picture of regional imbalance is so acute that it forms, as chief economic advisor Arvind Subramanian puts it, India’s biggest “political-economy puzzle”.

UP ‘s condition

Take UP, India’s most populous state and a political bellwether. In every general election, it decisively tilts India’s political scales. But on income, it still hugs the bottom of the graph. A couple of quick juxtapositions. If UP were a country, the size of its economy would be like that of Qatar. That would have been impressive, except for one minor detail: Qatar has only 2.5 million inhabitants, whereas UP has 215 million. This massive population, about the same as Brazil’s, means its ave­rage per capita income is no more than that of Burkina Faso, a landlocked sub-Saharan country. That implies, by common allusive practice, the gold standard in poverty.

In 1960, the richest state Maharashtra was twice as rich as Bihar. In 2014, Kerala was 4 times richer than Bihar, the poorest.

What’s cause for worry is how India has been unable, for decades now, to put into motion any kind of targeted policy thrust to address the regional imbalance.

For, the handful of states that climbed the income ladder real quick since the 1960s have ensured that they stay up there—Kerala, Gujarat, Tamil Nadu and Karnataka. And Kerala, despite its lower level of industry presence and dependence on remittances, has a model that spreads its prosperity fairly evenly (though it too is not without a gap between the creamy layer and the outliers). All this is in sharp contrast with the states that exhibit a strong developmental inertia.

One piece of evidence is the share of ‘Bimaru’ states in the total income of all states. In 2013-14, UP had a mere 1.2 per cent share! Again, throw in a few juxtapositions and the picture becomes starker. The share of Chhattisgarh, a new entrant in the race, was way higher at 14.5 per cent. Tripura, admittedly a poor state, improved its per capita income nearly six times between 1984 and 2014. (In 1984, the average Tripura resident earned Rs 11,537, according to India’s Economic Survey, which increased to Rs 64,712 in 2014).

Himachal Pradesh, which in the ’80s ranked in the middle, upped its per capita income four-fold. Orissa, once synonymous with the starvation deaths of Kalahandi, has cut rural poverty twice as fast as Bihar, and has consequently jumped three spots.

Its neighbour West Bengal, though, offers reasons for despair. A rich, industrialised state in the 1960s, it has slid down the ranks, letting states like Andhra Pradesh and Maharashtra take its place. One reason: de-industrialisation. Between 1998-1999 and 2004-2005, Bengal recorded a fall of 4 per cent in the number of people employed in the industrial sector.

Bihar’s case

Bihar is at the heart of the puzzle. It’s now one of India’s fastest growing states, mainly because of the low-base effect, a statistical phenomenon. If growth rates had been very low, even a small increase would arithmetically show up as a high figure. The state posted the highest average growth rate during the whole of the 11th Plan period (ending 2011-12). Consider these peaks: 15.69 per cent in 2006-07 and 14.48 per cent in 2012-13. Bihar even topped all states in terms of growth of per capita incomes.

Yet, the catch-up distance is the largest for Bihar. Adjusted for inflation, its net per capita income was the lowest (Rs 26,801 in 2015-16). UP came in just one spot above (at Rs 38,234). By comparison, Kerala was 365 per cent richer than Bihar.

What would be the impact of such uneven progress on people’s lives? If you are a young job-seeker in, say, Bihar or UP, you would be better off moving to Kerala, Gujarat, Karnataka or Maharashtra because you will likely end up being four times richer.

Ordinary Indians know this. Railway passenger traffic data, collected by the finance ministry, shows annual internal work migration doubled to about 9 million between 2011 and 2016. Loads of people are shifting out from these disadvantaged states.

This picture of inertia inverts global trends. Everywhere, poorer regions are climbing up. No Chinese province has been stuck at the poverty levels of three decades ago. This is precisely how it should be, according to what economists call “convergence”: a region with poor income and consumption data sees fast growth on those counts if its markets are linked to those of richer regions.

India’s economy has those linkages, yet paradoxically its states show a polarising picture of “divergence”—judging by net state domestic product (NSDP) in per capita terms, the most common measure that indicates the average income of a state’s resident.

The NSDP is a variant of state GDP, with subsidies, interests and taxes subtracted. Distributed per capita, it becomes a handy proxy for average income—a statistically kosher method. It’s not without flaws, of course. The total economic activity in a state, which is what state GDP or NSDP show, would obviously include high-value activity—mining, for example—concentrated in a tiny segment and may not accurately reflect the lack of prosperity outside it.

Bengal’s slide after the flight of industry shows that—once you take away those pockets, the data starts reflecting the actual immiseration outside. Maharashtra, minus Mumbai and Pune, would surely fare differently—its ranking does not reflect the distress in the farm sector. Kerala’s ranking, similarly, hides the destitution in its adivasi pockets. Still, assuming any wealth will inevitably percolate to some deg­ree, NSDP is one way to generalise.

Four times are the earnings of an average person in the richest state compared to his counterpart in the poorest state.

Altogether, 12 large states were analysed, including Bengal, Bihar, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Tamil Nadu and UP, using US satellite data for 1960.

They noticed that the richest state in 1960, Maharashtra, was twice as rich as the then poorest state, Bihar. By 2014, the richest state was Kerala, but its income was four times that of the “still poorest state of Bihar”. Their conclusion: “the initially richer states grew more rapidly in the liberalisation period” and stayed the course.

Kerala and Tamil Nadu have often been cited by economist Amartya Sen as models. These two have famously focused big on social spending, enhancing the state-led expansion of education, food security and health. These became critical inputs for a productive workforce and, in the case of Kerala, job emigrations. If Kerala were a country, it would rank alongside developed European economies. Life expectancy in Kerala is 82 years, the same as Sweden. Its infant mortal­ity rate of 12 per 1,000 live births is low, same as China’s.

There are signs of life in the Bimaru states too: consistently high growth in recent years shows Bihar is structurally changing. “But per capita income continues to be low, just as it was decades ago. I would blame our poverty load and last-mile hiccups,” says Vishnu Dayal Pandit, deputy director of Bihar’s directorate of economics and statistics.

Pandit has a point. A World Bank study in 2014 found Bihar limping with a huge “unmet demand” for rural jobs under NREGA. The scheme’s impact on rural poverty in Bihar was just 1 percentage point against a potential of 14 percentage points, the study found. Bihar’s population below the poverty line of about 54.4 per cent in 2004-05 came down only marginally to 53.5 per cent in 2009-10, according to erstwhile Planning Commission data.

Orissa, by contrast, shows a faster dec­line in poverty rates. Udit Sharma of the Institute for Studies in Industrial Development cites National Sample Survey data that shows the wages of casual workers there rising 17 per cent annually between 2009-10 and 2011-12—one of the highest.

“The best response is to allow maximum policy freedom to the states to innovate. The states, in turn, should allow greater freedom to the regions within, such as by empowering municipal cor­porations,” Dehejia says.

The whole paradigm of ‘growth’, of course, is not without its sceptics. Sociologist Ashis Nandy thinks there’s something fundamentally wrong about modern economic development. In a scholarly work, The Beautiful Expanding Future of Poverty, Nandy says the effects of development have been such that poverty, which always existed with India, has given way to utter destitution. He says he stands by it. “One can stick out one’s neck and claim the dominant model of development, whatever else it can do, cannot abolish poverty…. Otherwise, there would be no poor people in America,” he says.